Department Store Anchor Closures Can Trigger Co-tenancy Agreements

More than 6,800 stores will close this year, including hundreds of department stores, whose exit from shopping centers could spur other tenants to leave. While the anchors' importance has declined in recent years as consumers have shifted to e-commerce, many specialty stores still depend on them to generate foot traffic. Co-tenancy agreements, triggered by in-line stores, can redress leasing developments that negatively impact them. Smaller stores use an anchor's departure to win concessions from landlords such as rent reductions and terminating a lease with little or no penalty.
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